Customs, Excise and Gold Tribunal - Tamil Nadu
Malladi Drugs And Pharmaceuticals Ltd. vs Commr. Of C. Ex. on 16 January, 2001
Equivalent citations: 2001(74)ECC587, 2001(129)ELT621(TRI-CHENNAI)
ORDER S.L. Peeran, Member (J)
1.This appeal arises from Or-der-in-Appeal No. 222/92(M), dated 29-9-1992 by which the Commissioner (Appeals) has confirmed the Order-in-Original demanding duty of Rs. 61,33,177/- in terms of the show cause notice, dated 18-7-1991 and 20-1-1992 on the ground that the appellants have utilised the concessional rate of duty under Notification No. 31/99, dated 1-3-1988 and have not produced the end-use certificate for the period 1-3-1991 to 31-3-1991. The appellant's contention before the authorities was that the notification in question does not stipulate for production of end-use certificate as the inputs were purchased from domestic industry. They further contended that as the issue was also covered by large number of judgments of Tribunal and that of the Bombay High Court, therefore, they cited the case of Harish Brothers v. CCE of the Tribunal as reported in 1989 (40) E.L.T. 122 and that of the Bombay High Court judgment as reported in [1991 (56) E.L.T. 39 (Bom.)]. However, the Commissioner did not agree with both the judgments and held that as the concessional rate of duty was under a Notification, they are bound to produce the end-use certificate to claim the concessional benefit and referred to Trade Notice No. 44/90, dated 30-3-1990.
2. With regard to the contention that the use of bulk drug for manufacture of final product drugs was controlled under Drugs and Cosmatics Act, 1940 read with Drugs (Price Control) Order, 1987. The Commissioner (Appeals) has observed in paras 8 and 9 as follows :-
8. With regard to argument of the appellants that the usage of the impugned items is a matter concerning Drug Controller and not the Assistant Collector of Central Excise, I would like to mention that when the Government has granted concessional rate of duty on other bulk drugs" which is stated based on their usage in terms of Drugs (Prices Control) Order, 1987, read with Drugs Cosmetics Act, 1940 is it not the duty of the Assistant Collector of Central Excise to verify whether the concession is being availed correctly? If the Assistant Collector is removed from the picture, it is something like appointing a watchman for a bungalow and preventing him from performing his duties.
9. The case law reported in 1991 (37) ECR 23 (Bom.) and relied upon by the appellants also cannot be applied to the instant case in view of my findings recorded in para 7 of this order, as the issue that came up for consideration and decision before the Tribunal in both the reported cases are similar.
10. In view of the foregoing, the impugned order is correct in law, and the appeal is rejected as devoid of merits.
3. Ld. Advocate submits that these very arguments were agitated before the Tribunal in subsequent cases. However, as there was no stipulation in the Notification for production of end-use certificate, the Revenue's view was negative. He cites Camphor & Allied Products v. CCE [1998 (104) E.L.T. 526] which follows earlier judgments of the Tribunal. He submits that as the issue is totally covered and there is no other point required for determination, therefore the appeal is required to be allowed in terms of the ratio. He further submits that Commissioner (Appeals) was not justified in making the observations in para extracted supra and citations and judgments laid down by Tribunal and High Courts are binding on the authorities. In terms of the Apex Court's judgment in the case of UOI v. K.M. Shankarappa [2001 (127) E.L.T. 8 (S.C.)] which observations are noted on judicial discipline in paras 8 and 9 of the judgment.
4 Heard ld. SDR who submits that during the relevant period, the Revenue had issued a Trade Notice and the authorities were also bound by the Trade Notice and Board's instructions which have also been considered as binding on the authorities in the light of several Apex Court judgments.
5. On a careful consideration of the submission and on perusal of the records, we notice that the concessional rate of duty was in respect of an Excise Notification and not under Customs Notification. In a pari materia Customs Notification, there is a proviso for production of end-use certificate and the clearance being done at the imports stage under a bond and the bond is cancelled only on production of end-use certificate. The said procedure has not been laid down in the Excise Notification No. 31/88-C.E. and the concessional rate of duty in respect of manufacture of final drug is not based on production of end-use certificate as laid down in the judgment cited in Camphor & Allied Products [1998 (104) E.L.T. 526], this very point has been answered by extracting the notification which is noted below :-
2 We have heard Shri G. Shiv Dass, learned Advocate and Shri Sat-nam Singh, SDR Notification 31/88 is reproduced below :
'Effective rates of duty on certain goods, including bulk drugs - In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts goods of the description specified in column (2) of the Table hereto annexed and falling under Chapter 28, 29 or 30, as the case may be, of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), from so much of the duty of excise leviable thereon under the said Schedule, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (3) of the said Table.
THE TABLE _______________________________________________________________________________ Sl. No. Description of goods Rate of duty ________________________________________________________________________________ (1) (2) (3) ________________________________________________________________________________
01. Bulk drugs (including salts, esters and de- Nil rivatives, if any) specified under the First Schedule to the Drugs (Prices Control) Order, 1987, as amended from time to time.
02. Other bulk drugs 5% ad valorem
03. Medicinal grade Oxygen Nil
04. Medicinal grade Hydrogen Peroxide Nil
05. Anaesthetics Nil _______________________________________________________________________________ Explanation. - In this notification, the expression "bulk drug" shall have the same meaning assigned to it in the Drugs (Prices Control) Order, 1987.
(Notification No. 31/88-C.E., dated 1-3-1988).
3. The appellants are correct in submitting that there is no requirement under the notification for production of end-use certificate as contested that such requirement contained in predecessor notifications for bulk drugs such as Notifications 55/75 and 234/86. We also find that the Tribunal has held in the Collector of Central Excise v. Maize Products -1997 (94) E.L.T. 651 and Maize Products v. Collector of Central Excise - 1997 (94) E.L.T. 680 that Notification 31/88 does not stipulate the production of end-use certificate. The objection of the learned SDR that what is also required to be seen is whether the products under dispute are bulk drugs under the meaning ascribed to it in the Drugs (Prices Control) Order, 1987 is not tenable for the reasons that the show cause notices charge the appellants only with the non-production of end-use certificate and there is no charge that the products are not bulk drugs, and also for the reason that the classification lists during the relevant period have been approved under Chapter 29. Learned SDR is also unable to substantiate his contention that the products in dispute may not be covered by the definition of "bulk drugs" under Drugs (Prices Control) Order, 1987.
In view of the above, following the ratio of the Tribunal's decision in the case of Maize Products cited supra we set aside the impugned order and allow the appeal.
6. As regards the id. Advocate's plea that the judgment cited before the Commissioner ought to have been accepted, we notice that the plea is correct in the light of the Apex Court judgment cited in the case of UOI v. K.M. Shankarappa (supra) wherein the Apex Court in paras 8 and 9 have observed as follows :-
8. We are unable to accept the submission of the learned Counsel. The Government has chosen to establish a quasi-judicial body which has been given the powers, inter alia to decide the effect of the film on the public. Once a quasi-judicial body like the Appellate Tribunal, consisting of a retired Judge of a High Court or a person qualified to be a Judge of a High Court and other experts in the field, gives its decision that decision would be final and binding so far as the Executive and the Government is concerned. To permit the Executive to review and/or revise that decision would amount to interference with the exercise of judicial functions by a quasi-judicial Board. It would amount to subjecting the decision of a quasi-judicial body to the scrutiny of the Executive. Under our Constitution the position is reverse. The Executive has to obey judicial orders. Thus, Section 6(1) is a travesty of the rule of law which is one of the basic structures of the Constitution. The Legislature may, in certain cases, overrule or nullify the judicial or executive decision by enacting an appropriate legislation. However, without enacting an appropriate legislation, the Executive or the Legislaturecannotsetatnaughta judicial order. The Executive cannot sit in an appeal or review or revise a judicial order. The Appellate Tribunal consists of experts and decides matters quasi-judicially. A Secretary and/or Minister cannot sit in appeal or revision over those decisions. At the highest, the Government may appeal to the Tribunal itself for a review, if circumstances so warrant. But the Government would be bound by the ultimate decision of the Tribunal.
9. We fail to understand the apprehension expressed by the learned Counsel that there may be a law and order situation. Once an Expert Body has considered the impact of the film on the public and has cleared the film, it is no excuse to say that there may be a law and order situation. It is for the concerned State Government to see that the law and order is maintained. In any democratic Society there are bound to be divergent views. Merely because a small section of the society has a different view, from that as taken by the Tribunal, and choose to express their views by unlawful means would be no ground for the Executive to review or revise a decision of the Tribunal. In such a case, the clear duty of the Government is to ensure that law and order is maintained by taking appropriate actions against persons who choose to breach the law.
Ld. SDR submitted that the authorities are bound by Board's circulars in the light of Ranadey Micro Nutrients' case [1996 (87) E.L.T. 19 (S.C.)] and therefore the Commissioner (Appeals) cannot be faulted in the observations and not following the judgment. We are of the considered opinion that once High Court and Tribunal have given a ruling that overrides the Board's circular. Furthermore, there is no Board Circular under Section 37B but it was only a Trade Notice which was distinguishable. In view of the issue being covered the impugned order is set aside and appeal allowed with consequential relief, if any, as per law.